Where are the cheapest home insurance rates?

The cheapest home insurance rates can be found in areas where home prices are comparatively low, and natural disasters are rare. When determining the home insurance rates, underwriters perform risk assessment, considering a number of factors, such as location, cost of property and personal belongings, and the likelihood of natural disasters in the respective area.

If you live in a low-risk zone, you can consider yourself very lucky since your home insurance premiums will probably be below the national average, which - according to the latest report of the National Association of Insurance Commissioners (NAIC) - is $804 per year. Anything below this figure is considered a cheap home insurance rate (see Table 1 for a list of all the states that are at the lower end of the home insurance rate spectrum).

If, however, you live in an area prone to floods, hail, storm, earthquakes and other natural perils, you can pay over a thousand dollars in home insurance premiums, such as in Florida, Texas, Louisiana, Oklahoma, District of Columbia and Mississippi. Because natural disasters in these states are common, some insurance companies even pull out, making it impossible for home owners to obtain protection for their homes privately.

The good news is that almost all high-risk states have federal-run agencies committed to providing the necessary protection to home owners in the event of a devastating natural disaster.

Table 1. Home insurance rates below the national average by state.

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